PROJECT MANAGEMENTIN THE

CONSTRUCTION INDUSTRY

PROJECT MANAGEMENTIN THE

CONSTRUCTION INDUSTRY

By

SYED ALI DILAWERBE, MBA, PMP, CCC, MRICS, ACIArb, MICA, GMP

Senior Project Control and Claims ConsultantAbu Dhabi, UAE

(An Imprint of Laxmi Publications Pvt. Ltd.)An ISO 9001 : 2008 Company

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BOSTON (USA) ACCRA (GHANA) NAIROBI (KENYA)

PROJECT MANAGEMENT IN THE CONSTRUCTION INDUSTRY

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ContentsPreface vii

Acknowledgements viii

1. Construction Industry … (1–9)

2. Project Life Cycle … (10–12)

3. Project Execution and Control Overview … (13–14)

4. Project Execution Plan … (15–17)

5. Design Management Overview … (18–31)

6. Design Process … (32–39)

7. Value Engineering … (40–45)

8. Procurement and Contract Strategy … (46–50)

9. Tendering Process … (51–53)

10. Construction Planning and Scheduling … (54–59)

11. Programme Management and Control … (60–62)

12. Cost Control … (63–67)

13. Earn Value Analysis … (68–71)

14. KPI (Key Performance Indicators) … (72–77)

15. Quality Management … (78–80)

16. Safety … (81–85)

17. Logistic Plan … (86–87)

18. Change Management … (88–92)

19. Risk Management … (93–108)

20. The Claim Management Outline … (109–121)

21. Reports … (122–126)

22. Project Closeout … (127–132)

23. Templates … (133–140)

Glossary … (141–150)

References … (151–152)

Index … (153–156)

PrefaceThis is a focused book for Students, Project Managers, Construction Managers, Architects,Engineers, Surveyors, Programmers and Contract Administrators. It provides a comprehensiveintroduction to Design and Construction Management in order to meet the business needs ofthe construction industry as they change in a highly competitive global environment.

Also presents a complete set of step-by-step best practice procedures for managing anytype of project from concept to completion and will be invaluable in providing a way to achievesucces in any projects undertaken. It provides essential orientation and is a “must” for anyonewith an interest in the field of Project Management Related to Construction Projects.

This book has been prepared by giving due consideration to practical requirements andalso provides a comprehensive, down-to-earth guide to every aspect of Project Managementrelated to Construction Projects and also its purpose is to serve as a reference manual.

“Trying to manage a project without project management is like trying toplay a football game without a game plan.”

—K.Tate (Past Board Member, PMI)

—Author

AcknowledgementsI would like to dedicate this work to my daughter Zainab Ali Syed. Her presence has enrichedmy life beyond what I can express.

It is difficult to acknowledge all the people who have contributed to this book. Myheartfelt thanks go to them.

There are some people who must be recognized by name; my wife, Naghma Shireen Syedwho has worked on this book and for her patience, love and encouragement, I am indebted.

—Author

ConstructionChapter 1 Industry

1.1 OVERVIEW OF CONSTRUCTION INDUSTRY

The consultant or designer, usually an architect or engineer, would be appointed first to takethe clients instructions and draw up the necessary plans and specifications. The contractorwould then be appointed to carry out the work, to the instructions of the designer.

In recent years some features of the traditional route, such as the strict Compartmentalizingof design and construction, have led to problems as projects became more complex anddemanding. Other approaches have been developed, to meet the demands of clients for greaterflexibility and accountability.

client

Funding Agencies

Project Manager

Authorities

DesignConsultantsSpecialized

Consultants

ConstructionContractors

SupervisionConsultants

End Users

Operators

FacilityManager

Major Stakeholders

Fig. 1.1

A number of methods can now be taken in the procurement of building work, and thesecan be considered in two broad categories:

1

Project Management in the Construction Industry2

(i) Those which feature ‘multipoint’ accountability to the client, with individualorganizations separately responsible for particular aspects of design and forconstruction.

(ii) Those which provide single point accountability, with a single organization assumingresponsibility for all aspects of both design and construction

1.1.1 Major Stakeholders (See Fig. 1.1)

1.2 ORGANIZATION OF CONSTRUCTION INDUSTRY

This section describes the key roles in the building process by reference to the functionsperformed. Every project has a number of key people, who have key roles to play. Each ofthese role players has specific responsibilities, which if carried out in their prescribed manner,will ensure a successful project. The following list gives the some examples of theseorganizational roles:

1.2.1 List of Organizational Roles

Client

Client Representative

Programme manager

Project manager

Project planning manager or project planner

Cost manager or cost control manager

Contract Manager

Construction manager

Procurement manager

QA/QC manager

Contract Administrator

Chief Estimator

Project Engineer

Safety Engineer

Project support office.

In practice, the need for some of these roles depends on the size and complexity of theproject and the organizational structure of the company or authority carrying out the project.For example, a small organization carrying out only two or three small projects a year may notrequire, or indeed be able to afford, many of these roles. Having received the commission fromthe client, a good project manager supported by a planner and procurement manager andestablished well-documented quality control and risk procedures may well be able to deliverthe specified requirements.

3

The detailed descriptions of the above roles are:

1.2.2 Client

The client is the person or organization using and paying for services. In most standard formsof contract the client is referred to as the employer. The client may be represented by others,for example project manager and consultant.

1.2.3 Client’s Representative

The client’s representative is usually (but not necessarily) a member of the clients’ ownorganization, providing a well-informed day-to-day link with the project. The appointment ofa client‘s representative does not relieve you of the responsibility to take decisions and controlthe job.

1.2.4 Programme Manager

The individual to whom responsibility has been assigned for the overall management of thetime, cost and performance aspects of the projects. Again different organizations have differentdefinitions for the role of the programme manager or portfolio manager. In some companieshe/she would be called manager of projects or operations manager or operations director etc.but it is generally understood that the programme manager’s role is to co-ordinate the individualprojects which are linked to a common objective.

Whatever the definition, it is the programme manager who has the overall picture of theorganization’s project commitments. Many organizations carrying out a number of projectshave limited resources. It is the responsibility of the programme manager to allocate theseresources in the most cost-effective manner taking into consideration the various projectmilestones and deadlines as well as the usual cost restrictions. It is the programme managerwho may have to obtain further external resources as necessary and decide on their disposition.

1.2.5 Project Manager

It is not easy to define the responsibilities of a project manager, mainly because the scopecovered by such a position varies not only from industry to industry but also from onecompany to another. Three areas of responsibility, however, are nearly always part of theproject manager’s brief:

He must build the job to specification and to satisfy the operational requirements.

He must complete the project on time.

He must build the job within previously established budgetary constraints.

“Project managers bear ultimate responsibility for making things happen. Traditionally,they have carried out this role as mere implementers. To do their jobs they needed to havebasic administrative and technical competencies. Today they play a far broader role. In additionto the traditional skills, they need to have business skills, customer relations skills, andpolitical skills. Psychologically, they must be results-oriented self-starters with a high tolerancefor ambiguity, because little is clear-cut in today’s tumultuous business environment.Shortcomings in any of these areas can lead to project failure.

Construction Industry

Project Management in the Construction Industry4

“Project managers function as bandleaders who pull together their players each a specialistwith individual score and internal rhythm. Under the leader’s direction, they all respond to thesame beat.” —L.R. Sayles

1.2.6 Cost Manager or Cost Control Manager

The Cost Manager’s primary functions are to plan, develop, and supervise all cost functions.The Cost Manager is to insure that all project cost activities such as data collection, fieldestimating, productivity analysis and budget forecasting comply with company and clientrequirements. This position is responsible for the development and implementation of projectcost standards and procedures. The cost manager will implement a standard costing structureand ensure that all projects adhere to this standard. The cost department is to provide asupport service to the project teams to assist and guide the establishment of the projectbudgets and project control tools.

1.2.7 Contract Manager

The primary responsibilities of the contract manager are:

Participating, as necessary, in developing the solicitation and writing the draft documents.Contract administration must be considered during this process.

Monitoring the contractor’s progress and performance to ensure goods and servicesconform to the contract requirements.

Managing any state property used in contract performance.

Authorizing payments consistent with the contract terms.

Exercising state remedies, as appropriate, where a contractor’s performance is deficient.

Resolving disputes in a timely manner.

Documenting significant events.

Maintaining appropriate records.

The number of participants in the contract administration process will vary in numberfrom one to many depending on the size, level of risk and complexity of the contract.Early in the procurement process, identify staff to participate in contract management.Identify a single contract manager and others to assist the contract manager. Assignroles and responsibilities which may include:

Determining the sequence of activities, dependencies, required or desired outcomes,and acceptable performance levels.

Developing a timetable and start and end date for each performance component. Includemilestones with accompanying timeframes, and monitoring and reporting requirements.

Monitoring contractor activity on a specified frequency to identify problem areas.

Meeting with the contractor on a regular basis to review progress, discuss problemsand consider necessary changes.

Providing access to state facilities, equipment, data, staff, materials and information.

Contacting other staff as necessary to provide equipment and data.

Establishing scope of authority, clear lines of communication and reporting and specificindividuals who will interact directly with the contractor.

5

Establishing control of correspondence, data and reports.

Identifying potential problems and solutions.

Defining terms or conditions of default.

Establishing a procedure, identifying a responsible person and establishing a timeframefor handling noncompliance.

Establishing a procedure, identifying a responsible person and establishing a timeframe for handling non-compliance.

1.2.8 Procurement ManagerSupervise Purchase and Stores staff such as Purchase Officers, Stock Controller andStorekeepers.

Formulates procedures of the Purchase and Stores Department compatible with theCompany’s policy and ISO 9002 implementation.

Implements material codification systems.

Coordinate with all other Department Heads for the smooth functioning of the purchasingactivities.

Participate with top management for the implementation and application of the QualityStandard.

Appraise staff performance and work progress

Advise the top management on matters regarding the market condition i.e., price,supplier’s payment terms, etc.

Develops the vendors list through their pre-qualification in accordance with theformat prescribed by ISO Standard.

Perform evaluation of suppliers on a periodical basis.

Control and direct requisitions proceeds and LPO (Local Purchased order) issuance.

Follow up of surplus materials and assets and directs the internal transfer of thesame.

Overall control of Requisition and LPO updating, material delivery, etc. Solveinternal problems with Sites and suppliers.

Scrutinize and approves monthly valuation report and prepare internal or externalcorrespondences of Purchase and Stores Department.

Control Assets repair and maintenance through coordination with workshop.

Scrutiny of non-conformance reports received.

1.2.9 QA/QC ManagerThe Quality Manager (Management Representative) is responsible for implementation andmaintenance of the Quality System.

Ensures the implementation of the quality system and its maintenance in accordancewith the ISO 9002 International Standard.

Reports on the performance of the quality system to the General Manager for review,and recommends aspects for improving the same where possible.

Co-chair in the Management Review Meetings.

Construction Industry

Project Management in the Construction Industry6

Review with the Department Managers the quality system in their departments as andwhen required.

Monitor customers complaints and action them as required.

Formulate control of the documents and data control system.

Establish and discuss with concerned departments the internal quality audit plan.

Initiates follow up audit activities in order to verify them and record the implementationand effectiveness of the corrective and preventive actions taken.

Reports the final result of the internal audits to the General Manager during theManagement Review meeting.

1.2.10 Contract Administrator

Contract administration begins when specifications are being developed, and he has to workvery close with design team to develop the budget cost and time. The objectives are to achievethe project completion within the budget and time schedule. Following are the mainresponsibilities of a contract Administrator.

Pre-Contract

Preparing the Preliminary Budget estimate for time and cost and advising the cost andtime saving options to the Design team.

Preparing the actual budget cost after the final design.

Preparing the actual budget time.

Research and analyze the expecting critical issues as per similar old projects anddiscussion with technical peoples and accordingly amend the project and finalize theprocurement method.

Prepare and issue Tender Documents.

Issue invitation of Tender and Prequalify Tenderers.

Attend and analyze Tender queries and amend the tender documents.

Prepare tender evaluation and recommendations.

Award of Contracts.

Post Contract

Prepare the Contract Documents and signing of Contracts.

Prepare the actual cost and time of the project as per contract documents.

Study, analyze and approve the programme of works.

Verify and approve insurances, performance bond, Bank guarantee advance paymentetc.

Prepare a Document controlling, reporting, filing and communication system.

Monitoring the programme schedule, BOQ Quantity, and critical issues.

Negotiate and issue contract change notices and amendments to contracts in time.

Evaluate, negotiate and approve the claims from contractor in time.

Process progress payments in time.

Close-out the contract.

Project Management In TheConstruction Industry

Publisher : Laxmi Publications ISBN : 9789384872472 Author : Syed Ali Dilawer

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